Buying a property with acreage? Don’t forget the well & septic contingency!

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Well and septic contingency-

If you’re thinking about buying a house with acreage like a hobby farm, more than likely you will wind up needing this particular contingency addendum to purchase that home. It deals specifically with the septic system and the well. Because both of these items can be extremely expensive you want to make sure as a buyer that both of them are in proper functioning order before you purchase at home.

Septic tanks are found in several different forms but the most common are amount system and a drainage system. Both of them have holding tanks and are supposed to be pumped on a regular basis by a certified company. Most counties as well as townships require this to be serviced every three years as well as before a property transfers ownership. Not only to ensure that its functioning properly but to make sure that it’s not creating some type of environmental hazard. This is why the EPA will typically keep records as well from the county and state.

The well is something you want have tested for a couple of different things. First to make sure that the water is not contaminated with any pesticides or pollutants. To verify that it is a safe distance away from your septic system and thirdly that is functioning properly for the home. The well pretty much functions on its own but it does have a pump that draws the water up through the pipe into the house. That typically needs to be replaced once every 10 years or so. So when you’re having this inspection you want to verify that the well is pumping properly.

You as the buyer can take both of these tests on at your expense and choose your service providers within a certain amount of time for the contingency. It’s very similar to the home inspection contingency that I had written about earlier on. The other option is you can have the sellers provide for the cost of the inspection and
furnished you with the reports. Either way is fine, which ever you feel most comfortable with.

This is a very important steps to take when purchasing a property with the septic and well. The last thing you want to do is not verify that they are in working order because the cost to replace the septic system alone can run you well over $15,000. Not to mention you want to make sure that your compliant with all state and local laws.

This is the last of the series of buyer contingencies when purchasing a home. Please visit my YouTube page to view the others. Go to YouTube, type in realtorology or Tom Sommers to find my YouTube page. You can also read the rest of the blogs on my real estate website

If you have any questions please feel free to call me or email me.

Tom Sommers Edina Realty  952-994-7204

Financing Contingency. What you need to know about not losing your earnest money!

Financing Contingency.  What you need to know about not losing your earnest money!

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Continuing with the contingency series, today I want to talk about the financing contingency. If you been reading and following the other blogs you already know that a contingency is in addition to the main body of a purchase agreement for residential real estate. For those of you that are new and just joining, I’ll do a quick recap and say the contingency is something that is in place in a contract, to allow the buyer to get out of a contract should there be an issue.

Regarding the financing contingency, the biggest piece to this is being approved for a mortgage. Most of the contingencies as written say something along the lines of, if buyer cannot secure the financing specified in this purchase agreement, and the purchase agreement does not close on the closing date specified, this purchase agreement is canceled. Buyers and sellers shall immediately sign the cancellation of purchase agreement confirming said cancellation and directing all earnest money to be refunded to the buyer. This is your way out of purchasing a home if you can’t qualify for the financing. This is not to say that you shouldn’t go to a loan officer before you write the offer and get fully approved for the loan. This just gives you an option to get out if somehow your financial situation were to change.

  • There’s other piece is to this contingency which include
  • Is the seller contributing to the buyers closing costs?
  • Is this a first mortgage only?
  • Is a privately insured mortgage?
  • Is the rate fixed for a specific amount of time or is it an arm?
  • Is there a cap on the interest rate? Meaning that if the interest rates climb above a certain percentage rate before the buyer locks in, can the buyer cancel the contract?
  • If the seller does not feel comfortable with the above cancellation language, do they want a final underwriting letter by a specific date from the loan officer?
  • When are you the buyer, locking into your interest rate? Is it within five business days of final acceptance of the purchase agreement or at any time prior to closing as required by lender?
  • Are there any lender commitment work orders that you will be asking the seller to pay for?

This is pretty standard language whether you are using a conventional mortgage, FHA or VA loan. However if you’re using an FHA loan there’s an additional escape clause in the contingency that says if the home does not appraise at or above the purchase price the buyer can cancel the contract. You can also agree to renegotiate the purchase price at that point as well but it’s spelled out pretty clearly in the FHA contingency addendum in addition along with lender processing fees there is a portion that asks for any work orders will the seller or buyer be responsible for any reinspection fees?

Talking about this is just further proof that you need to hire a licensed real estate agent to help you through the process regardless of whether your a buyer or a seller. If you have more specific questions, please feel free to send me an email or call.

Tom Sommers  Edina Realty  952-994-7204

Want to buy a home but still have a home to sell? How do you protect yourself?

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Want to buy a home but still have a home to sell?  How do you protect yourself?

Continuing with my series on contingencies, this particular contingency is called the sale of a buyers property contingency. Or you can also say I’m purchasing your home contingent upon my home selling. You need to protect yourself when purchasing a home by using the specific form outlining this particular contingency. If you don’t you will be legally bound to the purchase and could end up owning two homes in making to mortgage payments. Most people want to avoid this so it’s very important when you’re drafting a purchase agreement to include this contingency.

  • Essentially what the contingency says is that you are going to or have listed your home located at x with a real estate agent or you will be listing it within x number of days.
  • The seller may remove the contingency at any time and for any reason. This is the one contingency that the seller has control of. They can just wake up one day and decide that the contingency on their house is hurting their ability to sell their home. So your kind of at the mercy of the seller when you present this form.
  • The one way you can remove the contingency so no other party can purchase the home is to give the seller within x number of business days proof of it valid purchase agreement for your home.
  • If the seller requests removal of the contingency in the buyer does not remove the contingency in a timely manner, the purchase agreement will be considered canceled.

So the long and short of all those highlights are you are at the mercy of the seller until you get your property sold. Typically you have a certain amount of time once the contingency is been called to get that home sold. If you’re unable to get your home sold within that timeframe the seller has a right to cancel that purchase agreement and work with another buyer. Biggest downside for a buyer in this is that you have no control over the situation and you typically will get one of two things. You’ll either get a better price or longer term to get your home sold. In most cases you don’t get both.

The upside for the seller is they do have a signed offer on their home and they have the benefit of continuing to try to sell their home to somebody else in the event that you can perform and get your home sold. You gonna want to take a long hard look at this before you decide to move forward with it. Discuss it with your real estate professional so they can give you all of your choices to pick the best option for you.

Tom Sommers Edina Realty 952-994-7204

What are my rights as a buyer regarding association documents?


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What are my rights as a buyer regarding association documents?

In continuing with the series on home contingencies, now let’s talk about the addendum to purchase agreement: condominium/townhouse/cooperative common interest community (cic).

If you’ve read any of the other blogs you will know that the contingency is something that must happen in a purchase agreement before the purchase agreement can move forward. If your purchasing a condominium, townhouse or any home that has been Association, you have a right to review any and all of the Association documentation. This includes-

  • Resale disclosure certificate
  • All amendments and updates
  • Articles of incorporation
  • Bylaws of the Association
  • Rules and regulations
  • Projected annual budget
  • Declaration of the Association

All of these items should be handed to you by the seller. At this point according to Minnesota state law you have 10 days to review all of the documentation. If at any time during the 10 days you find something in that paperwork that you do not agree to, you have a right to cancel your purchase agreement and move on to a different home. It’s very important that you take the time to read through these documents. I also encourage you to make sure to get the name and phone number for the contact people at the Association as well as the management company. You never want to rely on a third party to get answers for your questions when it comes to these documents. You want to see it in writing for yourself, if that’s not the case you want to call those people directly to get the answers. This will save you an awful lot of time and hassle and a problem at the closing table.

Tom Sommers Edina Realty 952-994-7204

What is an Inspection Contingency?

 What is an Inspection Contingency?

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To review, a contingency is something that is put in place in a purchase agreement to solve an issue before the sale of the home can move forward. Contingencies come in all types from financing to something broad as rental of farmland.

Today I’m going to focus on inspection contingencies. In Minnesota the form is called addendum to purchase agreement: inspection contingency. You have the main body of the purchase agreement and everything else is an attachment. The contingency form is something that is attached to the purchase agreemen that performs a specific task. With this particular contingency. It focuses on several different aspects of a home inspection.

  • The buyer has a right to a full home inspection to their satisfaction. This means they can higher any inspection company or inspector that they choose.
  • The form asks if there will be intrusive testing, meaning will the inspector be drilling holes in the wall? If so it is the responsibility of the buyer and the inspector at the buyers expense to have any type of intrusive testing be repaired by the end of the inspection.
  • The inspection must be performed within a certain amount of business days from the final acceptance date of the purchase agreement. Most typically I see five business days but like everything else in a purchase agreement the amount of days is negotiable.
  • Once you have completed the inspection and have reviewed the documentation you will have another specific amount of business days to furnish the seller in writing with a list of issues. You can resolve this in many different ways by simply asking for a price adjustment, asking the seller to make the repairs or canceling the purchase agreement.
  • Once you have turned this list in writing over to the seller the last piece of this contingency goes into effect which gives you X number of business days to negotiate an agreement with the seller. I’m typically seeing two business days for this as well as the aforementioned list. If you’re not able to put an agreement together by the end of that last business day, the contract is automatically canceled.
  • There’s also provision in this contingency to allow all parties to agree to a specific amount of time after the cancellation of the purchase agreement, to sign a cancellation and return all earnest money to the buyer. Again typically I’m seeing two business days but it’s negotiable.
  • Lastly there is an option to allow the seller to continue to market the property during this contingency period.

The language is very straightforward and as a buyers agent or a sellers agent, it’s my job to make sure that my clients are working within the confines of the agreed contingency. The other thing I’d like to point out is it’s important to note that many cities have a time of sale inspection. That is not the same as a home inspection paid for by the buyer. You also do not want to confuse this home inspection with an appraisal. All three of them have very different functions.

I would never recommend purchasing a home with out hiring a home inspection. It’s not just about finding problems with the home, it’s also to teach you about how your home functions. From the sellers side you want to encourage the buyer to have a home inspection. This is one more thing that will give you more protection by discovering any issues ahead of time. For more information on contingencies please visit my blog and YouTube channel for other updates.

What are contingencies in a residential real estate transaction?

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A contingency is anything that is in a contract that has to be resolved before the transaction can move forward.  They are specifically placed into a contract to resolve specific issues.  There can be an endless number of them depending on the contract and will vary from transaction to transaction.  There are 6 that are the most common.

  • Inspection contingency-  This is added to the purchase agreement to allow the buyer a specific amount of time to hire an independent inspector to look over the home. Typically the buyer has 3 to 5 business days from time of the signed agreement by all parties to have this completed
  • Condo or town home association contingency-  If you are buying a town home or condo in the state of Minnesota by law the seller must provide you with all of the association documents to review.  You typically have 10 day once you receive them to review all of the information.
  • Contingency of the buyers home- This is used when the buyer that wants to purchase a home still has a home they must sell before they can close on the one they are trying to buy.  This gives the buyer an out of they can’t get their home sold, they don’t have to move forward with the purchase.
  • Financing contingency-  This allows the buyer to move through the loan process to buy the home.  If for some reason they can’t qualify for a mortgage, they can get out of the purchase.  Plus many will say the sale price of the home must have the same appraisal value or the buyers won’t qualify.
  • Septic and well inspection contingency-  If you are buying a property with a well and or septic system, this contingency says that both must pass inspection and be in proper working order.  If not the buyer can back out of the transaction.
  • Miscellaneous contingency- This cover almost anything else.  Anything from sub division of land, can the buyer put up a building or add an addition.

There are all types of contingencies in a real estate transaction so its really important no matter if you are the buyer or the seller to have a full time licensed real estate professional representing you.

If you have any questions or concerns please feel free to email me at-

Incredible Rambler just reduced to $199,900!

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Welcome to 8601 Queen Ave. S. in Bloomington Minnesota 55431. This wonderful Rambler has just been reduced to a list price of $199,900. The location is fantastic right off of Penn Avenue and 86 Street. Your less than five minutes to Interstate 494, which makes a very quick commute to downtown or either side of the Metro area.

This home is been lovingly cared for by its current owners and they have continued to update and upgrade the home over the last 10+ years. It has maintenance-free siding, a new sewer line, a newer furnace and air conditioner so you can feel confident that all of the maintenance of the home has been cared for. This is a home that you can buy with confidence!

some of the many features include-

Eat-in kitchen

informal dining

three bedrooms on the main level

beautiful hardwood floors

newer windows

huge corner lot

fenced backyard

oversized two-car garage with attached workshop

lower level family room

lots of storage

all appliances stay with the home

If you have any questions or would like to schedule the showing please call Tom Sommers 952-994- 7204


Priced reduced! Charming home near Lake Nokomis

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This beautiful Rambler style home has three bedrooms and two bathrooms. It’s located at 5122 38th Ave. S. in Minneapolis Minnesota. If you are a first-time homebuyer looking for a great opportunity to get into your own home or someone who is simply downsizing, this could be a great fit.

Features of the home include-

Maintenance-free siding

huge eat-in kitchen

original hardwood floors

formal dining room

finished lower level

attic storage space

large deck

fenced private backyard

oversize one car garage with storage

alley access

walking distance to Lake Nokomis

close to shopping

in addition the owner has put a new roof on the home in 2011, drain tiled the basement in 2011 along with other upgrades. Making this home virtually maintenance free.

In less than 10 minutes to downtown Minneapolis and five minutes to everything else. If you dreamed of living in the city on a nice quiet block, I encourage you to take a look at this home.

To schedule appointment or to have all of your questions answered please call-

Tom Sommers 952.994.7204

17265 Marshfield Lane Prior Lake, MN 55372 – Home For Sale

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17265 Marshfield Lane Prior Lake, MN 55372 – Home For Sale

Are you looking for a townhome with all living on one level? A townhome with a huge master suite, a private backyard and close to shopping? If these are some of your criteria you may have found the right home for you. This spacious open floor plan was built in 2002.

The exterior is vinyl and maintenance free. The Association fee is only $190 per month. It covers sanitation, snow and lawn care, outside maintenance, hazard insurance, water and sewer, building exterior and professional management. The location is wonderful your less than five minutes from downtown prior Lake and less than 10 minutes to all the shopping you could want. In addition your only five minutes from 35W which makes getting to downtown Minneapolis less than 30 minutes.

The layout of the unit is very open and it has all living on one level. As you enter the home on the right you see the second bedroom which can be a home office and to the left and eating kitchen with the pantry. That leads to the main level laundry room at the attached two-car garage. Down the hall from the entryway you will find a full bathroom, large dining room, family room with vaulted ceiling and sunroom. The master bedroom is a full master suite complete with a walk-in closet and a full private master bath.

The lower level is completely finished with the third bedroom, third bathroom and tons of storage. The lower level family room is adjacent to a full wet bar. This space is perfect for entertaining and family functions. The bonus is the back room which is set up for a home theater. So if you’re looking to downsize from a larger home to something with no stairs yet a lower level that’s finished for when you need it, this is a great option for you. Come take a look and call me if you have any questions.

Tom Sommers | Edina Realty | 952.994.7294

7 things that hurt your home’s value when you go to sell.






7 things that hurt your home’s value when you go to sell.


Increase your chances of getting the most money for your home by avoiding these common mistakes.


Owning a home is a very personal thing because some these people feel that this is the one place that they can make their very own. This is very true but unfortunately in the world we live in you always have to consider how it will be perceived by potential buyers when you go to sell your home. As a real estate agent who sees more homes than I can count in a year, you would be surprised by some of the mistakes I see made by homeowners on a very consistent basis. I’d like to clue you in on the 10 things to avoid that can severely hurt the value of your home when you go to sell it.


Over improving your home for the neighborhood you live in- So you’ve always dreamed of having an outdoor kitchen? Is nothing wrong with putting one in but if you don’t see them in the price range in which your home is in there’s a very good chance it will never see the money back out of it. Its one thing to purchase the materials and do all the labor yourself, but it’s another thing to pay full contractor prices for an upgrade like this. There are many wonderful improvements to home that will not give you your value back. Another one would be an in-ground pool. If you decide to put in an in-ground pool know ahead of time that for every buyer that wants one another buyer will look at it as having no value. If your house is worth $250,000 and you put $100,000 worth of improvements into it, unless there are comparable sales to give you that extra hundred thousand dollars chances are that’s about how much you’re going to lose. This is where real estate agent can be very handy to discuss projects while you own your home. Calling up an agent and saying I’m thinking about adding this space or changing the kitchen can sometimes help to get that outsiders perspective.


Not fixing the small stuff -When you live in a home for a number of years it’s easy to start looking past minor problems and just live with them. You have to remember when it comes to selling a home; the buyers will notice those minor problems. These can include doors that don’t shut right windows with broken latches, broken grout in between the tiles on the floor, broken light fixtures or any other minor repair you can think of. It’s in your best interest to find a really good handyman that can come in and fix all of these items. Many of my clients can get these issues corrected and a half of the day. The money you spend to fix these minor things will far outweigh the cost of that handyman. When buyers are looking at homes they will at times nit-pick a home because there’s more than one that they like and it’s the only way they’re able to choose one over the other. Plus when you have the minor issues fixed and they don’t notice things that have a tendency not to look as hard. Do something that your competition is unwilling to do or has forgotten to do.


Be aware of items in your home that make it look dated- Buyers in all price ranges want to feel like they’re moving into a newer feeling home even when it has a classic look. Some of the simple things you can do in today’s market to make that happen without spending a lot of money is to change a few basic items that can make a big impact. For starters, if you have gold or brass handles, doorknobs, hinges or light fixtures removed them. Go with a brushed nickel or oil rubbed bronze. You can find products made out of these finishes in all price ranges. When you look at your fireplace does it have a gold vent cover? If it does go out and buy yourself a four dollar can of high heat spray paint and paint that grill a flat black. You will be amazed at what these small changes will make when a buyer sees your home for the first time.


Stay off the “what’s hot right now” bandwagon- If you’re considering doing upgrades in your home think about the longevity of that upgrade. Case in point off-white cabinets, trim work indoors have been in homes for hundreds of years. You still see that in new construction today. If you like this look changing cabinet and wood finishing is an upgrade. Just don’t get stuck like so many people from the 50s did with a trendy blonde wood or that chocolate brown wood from the late 70s. If you’re doing a backsplash in a kitchen think twice before you put a glass backsplash in over stone. I’m not saying that glasses bad I’m simply saying consider if it will be trendy and out in a couple of years? Think before you act consult with different people who work in the home improvement business. Many of them have a pretty good insight as to whether something is going to be trendy or not. You can never go wrong with natural stone and real wood. It’s the man-made materials that can be suspect.


Remodeling the entire house and doing all of the work yourself- Unless you’re a contractor and you know what you’re doing, higher out the bigger jobs. It’s very important that the home is consistent in quality on all levels. When you’re remodeling the kitchen, a bathroom or any other large project you have to get the job completely done. If you start to cut corners the quality of the work suffers and in the long run if you don’t know what you’re doing, it will cost you more money to have a professional come out and fix it. This goes back to fixing the minor issues. If you think the buyers won’t see these things and point them out you’re kidding yourself. Not to mention they have an inspector typically coming out who will certainly find the issues for the buyer.


Destroying the floor plan- I’m guessing your first thought is how do you destroy the floor plan? Easy you do silly things like take a three-bedroom house and remove one of the bedrooms by turning it into a walk-in closet. Or you take a three car garage extend your family room and turn it into a 1 1/2 car garage. These types of changes to the floor plan can really hurt the value of your home by taking away some of the most basic must haves for most buyers. Before you make these types of changes, take a moment and call your real estate agent to discuss the possible implications.


Filling every room of your home with furniture- When you’re selling your home, as you present it you want give the feeling that all of the rooms are open and spacious. One of the first things that destroy this feeling for buyers is when there’s too much furniture in the room. Staging can really help to correct a problem like this and is well worth the value that the service provides. Just because there’s a wall doesn’t mean it has to be filled with a bookshelf, desk or other piece of furniture. You want all of the entrances to every room including the bedrooms to feel open.